feature story kagome and tomatoes kagome meets tomatoes · was how they created the bright red...

Ichitaro observes the germination of a tomato.

Ichitaro launches a tomato processing business.

Fresh Tomatoes

Tomatoes for processing

Ichitaro Kanie (1904)

Momotaro®

Kagome 77

Cross-section of a fresh tomato

Cross-section oftomato for processing

Grown under a large amount of sunlight

Tomatoes for processing are used for tomato juice, canned whole tomatoes, pizza sauce, etc.

Fresh tomato dish

Grown in a greenhouse

Cherry tomatoes

San Marzano

1899

The Founder, Ichitaro Kanie, Who Believed in the Potential of Tomatoes

Kagome meets tomatoes

“Souka Shasei Zukan” by Kano Tanyu (Tokyo National Museum) Image:

TNM Image Archive

First factory and tomato straining (around 1910)

Tomatoes were first introduced to Japan in the mid-17th century. At the time, they were treated not as food but as a rare ornamental plant in Japan. It was only in the Meiji period (1868 – 1912) that tomatoes began to be consumed as food. This occurred after tomatoes were reintroduced from Europe and the United States together with other Western vegetables such as cabbages, onions, asparagus, and carrots. Ichitaro Kanie, who founded Kagome, returned to Japan after completing his duties in the First Sino-Japanese War (1894 – 1895) and began growing Western vegetables after being inspired by his superior’s words in the Army. Tomatoes were included among these vegetables; however, their grassy smell and unfamiliar bright red color did not appeal to consumers. Tomatoes were the only vegetables that did not sell at all for the first four years and were left to rot in the fields, causing serious problems.

Japanese people like to eat tomatoes uncooked. The reason is that tomatoes with pink flesh such as the Momotaro® tomato, which is suitable for eating raw, have been grown since the Meiji period, and many varieties have been created through improvements. Tomatoes with a variety of characteristics such as different sizes and flavors and high nutritional content such as lycopene and GABA are now sold, and varieties with red flesh are also sold as fresh tomatoes. They are grown by putting up supports in lanes or greenhouses (cultivation using supports).

Tomato varieties for processing in Japan must adhere to the standards established by the Ministry of Agriculture, Forestry and Fisheries, which include that the tomatoes must be fully ripened, their red color must be brighter than the standard red plate, and their lycopene content must be 7 mg or higher per 100 g. The most distinct characteristic is that the skin is strong and the flesh is dense and difficult to squash, sufficient to withstand transportation in a container. Tomatoes for processing are cultivated without supports. They are grown by letting the stems crawl along the ground without using supports, which saves the labor of the producers and allows large-scale planting.

Ichitaro still did not give up, however. At the agricultural experiment station in Aichi Prefecture where he worked temporarily to learn tomato cultivation techniques, he heard that in the United States, tomatoes were being used after processing. He immediately obtained a bottle of imported tomato sauce from a Western-style hotel and created a prototype through trial and error with his family. They peeled, simmered, and strained the tomatoes, and bottled the result. This was how they created the bright red tomato sauce. In July 1903, the tomato sauce that Ichitaro made in his barn at home was shipped out for the first time. Its color, which was more attractive than that of imported tomato sauce, and its fresh flavor appealed to consumers, and Ichitaro’s business started out smoothly.

Difference between Fresh Tomatoes and Tomatoes for Processing

Feature Story Kagome and Tomatoes

2 3Kagome Integrated Report 2018 Kagome Integrated Report 2018

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lans for the FutureStrategies for Achieving Sustainable Growth

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entFinancial Performance/Company Information

Kagome’s business of tomatoes for processing

Because variety development takes at least five years, Kagome forecasts market demand for several years in the future, identifies flavors, traits, and pest resistance, etc. of tomatoes for processing that match the forecasts, and determines the specifications of parent varieties to produce such varieties. We then crossbreed the parent varieties created by collecting and combining genetic resources that potentially meet these specifications and produce a large number of new variety candidates. The new variety candidates are narrowed down by being repeatedly evaluated and improved at multiple facilities over several years, and the varieties that are ultimately selected are commercialized. The seeds (F1) that have been developed through this process undergo careful quality examinations and necessary sterilization, processing, etc. and are subsequently shipped out.

Developing varieties and selling seeds

Varieties are developed through crossbreeding by forecasting market demand for several years into the future.

Kagome’s research division in Japan stores

a large amount of genetic resources,

including 7,500 types of tomato seeds, and

creates databases. Using these resources,

we develop tomato varieties without using

genetic modification technology. Kagome’s

subsidiary, United Genetics Holdings LLC

(U.S.), develops and produces seeds of

tomatoes and other vegetables and fruits

and sells them in 85 countries around the

world.

Japan

R&D Seed production

R&D Seed production Seed processing

Seed processing

Sale of seeds

Tomato

R&D �ow

Innovation DivisionAgri-Business Division

OverseasSeed processing �ow Seed selling �owSeed production �ow

United Genetics Holdings LLC

Vegetables and fruits including tomatoes

Sale of seeds and seedlings

R&D(approx. 2 yrs.)

Selectionand evaluation(approx. 5 yrs.)

Introductionand evaluation(approx. 3 yrs.)

Seed stock production(approx. 1 yr.)

F1 seed production(approx. 1 yr.)

Acceptance inspection

Quality exam

ination

Seed processing

Field trial

Business fairs

Shipping

Agriculture

Kagome procures tomato products such as

tomato paste from around the world. Kagome

field masters who support the producers of

tomatoes for processing that become the

ingredients for such products strictly inspect

the growth of tomatoes and agrochemicals

used and maintain stable and safe cultivation.

Japan

NorthernHemisphere

(U.S.)

Japan

SouthernHemisphere(Australia)

Domestic tomato calendar

Agri-BusinessDivision

OverseasIngomar

HITKagame AustraliaKagome senegal

Overseas tomato calendar (Northern and Southern Hemispheres)

A system of stably procuring ingredients from around the world is required for selling tomato products all year round. The areas that are suitable for cultivating high-quality tomatoes are concentrated at latitudes 35 degrees north and 40 degrees south, which are called the tomato belts. Kagome’s tomato production bases are distributed around these tomato belts in the Northern and Southern Hemispheres. The harvest season starts around July in Spain, Portugal, Italy, the U.S. (California), and Japan in the Northern Hemisphere and around January in Australia, Chile, and other regions in the Southern Hemisphere. Kagome has established stable procurement networks by combining production areas with different cultivation periods.

Stable procurement by combining cultivation areas in the Northern and Southern Hemispheres

Yields of tomatoes for processing in Japan and overseas subsidiaries

Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

Planting Cultivation Harvesting andshipping



Unit: tons

* Plan

2016 2017 2018

Kagome 19,399 18,944 17,300*

HIT 395,583 430,538 380,000*

KAU 236,612 157,299 177,237

Senegal – – 1,586


We are growing tomatoes for processing around the world. We operate agriculture with high safety standards based on the quality awareness that “fields are the primary production plant.”

The most upstream part of the vertical integration business model.Kagome develops tomato varieties internally and sells seeds in 85 countries around the world.


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Kagome’s business of tomatoes for processing

Producing tomato paste that becomes the base for all tomato products to meet users needs

From tomato juice to salsa sauceProviding a large variety of products that maximize the value of tomatoes


Tomato sauce

Straight tomato juice

Mixed vegetable juice

From-concentrate tomato juice

Tomato condiments

6-time concentration

RO concentration

Tomato paste

RO puree

Coarse straining

Dice cut

Sorting

Concentration

Sorting

Sterilization and filling




Sterilization and �lling








Whole tomatoes

Passata Supernatant

Pulp Tomato pulp

Tomato extract

Diced tomatoes

Water

Water

Water

Salt, sugar, spices, etc.

Water

Water Vegetables other than tomatoes

Salt, sugar, spices, etc.

Primary processing Secondary processing

Primary processing 1.5 processing Secondary processing

Sweetness, sourness, taste, etc. in tomato flavors vary among cultivation areas in different countries and varieties. Tomato paste that becomes the base for many tomato products is produced by using the characteristics of each cultivation area and by selecting manufacturing methods suited to the purposes of use. The hot break process*1 can be selected for pizza sauces and meat sauces that require high viscosity, and the cold break process*2 can be selected for products that do not require viscosity. Kagome also offers a large selection of container sizes for household use to industrial use. Kagome’s strength in primary processing is its ability to combine these to meet the varying needs of users.*1 Hot break process: Creates high viscosity by heating tomatoes at a high temperature after crushing and deactivating the pectin breakdown enzyme to reduce pectin breakdown*2 Cold break process: Creates low viscosity by heating at a low temperature that does not deactivate the pectin breakdown enzyme after crushing to promote pectin breakdown

High value provided by combining tomato cultivation areas, heating methods, and containers

Examples of variation of tomato products

ダミー

ダミー

Puree concentrated by passing squeezed tomato through a reverse osmosis membrane tube and permeating out water. It is characterized by a fresher flavor and less color degradation compared to vacuum heating concentration. This RO concentration is Kagome’s patented technology.

Broadly divided into two types – the straight type made by directly sterilizing and packing squeezed tomato, and the from-concentrate type made by reconstituting tomato paste with water. We manufacture tomato juice with a fresh flavor and fragrance, even when it is from-concentrate, by blending it with RO puree.

Tomato extract and tomato pulp are tomato ingredients obtained by centrifuging tomato paste with water added. Tomato extract is used to add tomato aroma, and tomato pulp is used primarily to enhance the texture of fiber in vegetable beverages, etc.

A familiar condiment made by adding sugar, brewed vinegar, salt, onions, spices, etc. to season tomato paste. There are tomato ketchup products made with organic tomatoes and high-lycopene tomatoes.

Difference between tomato break temperatures

Tomato puree

Diced tomatoes

RO puree

Tomato puree

Primary processing

Secondary processing

1.5 processing

Secondary processing

Tomato ketchupTomato juice

Tomatopulp

TomatoextractRO puree

Tom

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Centr

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tion

Primary processing is the process of chang-

ing raw tomatoes into manageable forms,

which are broadly divided into two: making

puree or paste after squeeze and concentra-

tion or processing without squeeze to main-

tain the tomato shapes. Tomato paste

becomes an ingredient for various tomato

products. Whole tomatoes that maintain

their tomato shape and cut tomatoes are used

as ingredients in a wide variety of dishes.

Kagome maintains an extensive range of

tomatoes for processing, including varieties

and cultivation areas, and advanced produc-

tion technology to meet the demand of con-

sumers around the world.

A variety of tomato products can be made

from the tomato paste produced in the prima-

ry processing. In the secondary processing,

we manufacture a wide range of products,

from condiments such as tomato ketchup and

tomato sauce to beverages such as tomato

juice and vegetable juice that utilize the flavor

of tomatoes by adding flavorings and other

ingredients to tomato paste.

Hot break Cold break

Heating temperature

85°C – 95°C 60°C – 70°C

Viscosity High Low

Property Smooth Coarse

Brightness Bright Deep

FlavorSense of mildly

simmered tomatoesSharp juicy flesh


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KAGOME AGRI-BUSINESSRESEARCH AND DEVELOPMENTCENTER, UNIPESSOAL LDA (Portugal)

From 2016R&D activities mostly in agricultureNew business development in value chains

Holding da IndustriaTransformadora do Tomate,SGPS S.A. (HIT) (Portugal)

From 2007Manufacturing and sale of tomato-based products such as tomato paste and pizza sauce

Vegitalia S.p.A. (Italy)

From 2003Processing, refrigeration and sale of Mediterranean vegetables

Kagome Senegal Sarl (Senegal)

From 2017Cultivation, purchase and sale of tomatoes for processing

Kagome Longson Sdn. Bhd. (Malaysia)

From 2014Sale of halal condiments for food service use

United Genetics Holdings LLC (USA)

From 2013Development, production, and sale of seeds of tomatoes, vegetables, and fruits

Ingomar Packing Company,LLC (USA)

From 2016Manufacturing and sale of tomato paste and diced tomatoes

Kagome Inc. (USA)

From 1998Manufacturing and sale of food service-use culinary sauce for large restaurant chains in the U.S.

Kagome (Tianjin) Food Industry Co., Ltd. (China)

From 2013Manufacturing and sale of condiments packed in film containers

Taiwan Kagome Co., Ltd. (Taiwan)

From 1967Manufacturing and sale of condiments and beverages

Joint venture established (Hong Kong)

From 2018Import and sale of beverages

Kagome Foods, Inc. (USA)

From 2007Manufacturing and sale of various food service-use sauces and margarine and other vegetable-oil-based products

United Genetics TurkeyTohum Fide A.S. (Turkey)

From 1987Production and sale of seeds, and seedling business

　　　

* Equity-method affiliate

Kagome Australia Pty Ltd. (KAU) (Australia)

From 2010Production of tomatoes for processing and manufacturing and sale of tomato-based products

Major businesses * As of the end of December 2017

Kagome Co., Ltd.

A network connected from seeds to table to deliver products around the world

Tomato production, processing and sales facilities around the world

Tomatoes’ quality characteristics vary significantly in different producing centers. As shown on the right, tomatoes in Japan and China are more sour, and those in Chile and Portugal are sweeter. The ability to apply these characteristics of the different producing centers to product development is one of the strengths of Kagome, which has a global network.

Product development only possible through

knowledge of tomatoes around the world

Large fresh tomato cultivation facilities in Japan (domestic subsidiaries)

Cooking sauces Seeds Other Tomato paste

Tomato belts(areas suited to tomato cultivation)[latitude 35 degrees north and 40 degrees south]


Kada Greenfarm Co., Ltd.(Wakayama)

From 2004Growing Kagome brand fresh tomatoes primarily for the Chubu and Kansai regions

Hibikinada Greenfarm Co., Ltd.(Fukuoka)

From 2005Growing Kagome brand fresh tomatoes primarily for western Japan

Iwaki Onahama Greenfarm Co., Ltd.(Fukushima)

From 2005 Kagome’s largest vegetable farm. Growing Kagome brand fresh tomatoes primarily for eastern Japan

Our strength is having facilities largely in the areas suited for tomato cultivation called the tomato belts (latitude 35 degrees north and 40 degrees south) and a business model based on vertical integration from seeds and cultivation to primary and secondary processing and sales. The Kagome Group consists of 41 subsidiaries and four affiliates, and we use the expertise we have acquired in Japan to survey numerous sites around the world, determine the optimal locations for cultivation, and operate business in a number of countries. Through this business, we contribute to the development of the countries and local producers while meeting the demands of local consumers.

Examples of producing countries and characteristics of tomatoes for processing

Producing country Sweetness Sourness Flavor Flavor Type Major Processed Products

Japan Medium Strong Medium Sour Paste, puree, juice

China Medium Strong Medium Sour Paste, ketchup

Chile Strong Medium Weak Sweet Paste, ketchup, juice

Italy Medium Medium Strong Flavor Whole tomatoes, diced tomatoes, passata, paste

Turkey Medium Medium Medium Balanced Paste, diced tomatoes, puree

USA Medium Medium Medium Balanced Paste, juice, diced tomatoes, ketchup

Portugal Strong Medium Medium Sweet Paste, puree, passata, juice

Australia Strong Medium Medium Sweet Paste


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Potential of tomatoes for processing and the outlook of Kagome’s business

Demand for tomatoes for processing will increase as emerging economies grow

Efforts to develop the tomato industry in regions with potential growth

We will aim to achieve sustainable growth by solving social issues in the local communities through the optimization of the business model based on

vertically integrated multi-regional value chains of tomatoes for processing.

Aiming for market development and the developmentof the tomato industry

People in India use a large amount of toma-toes in their cooking, but because toma-to-based products are expensive, households and the restaurant industry spend time and energy on cooking with fresh tomatoes. The market price of raw tomatoes varies depend-ing on the crop and is unstable, and rapid rises in price and significant waste after an abundant harvest have become the norm.

We will increase convenience, stabilize prices and create local jobs to contribute to the develop-ment of the Indian economy by growing tomatoes for processing and manufacturing and selling processed products in India.

Market growth can be expected based on popula-tion growth and economic development.

We commenced the survey of location conditions and trial cultivation in 2016 with the aim of commercializa-tion. Based on our prog-ress, we will establish a business plan in 2018.

Situation Desirable state Environment Action

Although tomato paste is deeply rooted in the local food culture as a basic condiment, a lack of technology for growing tomatoes for processing and the high risk of damage from diseases and pests prevent the maintenance of quality and volumes, which drive people to rely largely on imported tomato-based prod-ucts.

We will increase convenience, stabilize prices, and create local jobs to contribute to the develop-ment of the Senegalese economy by growing tomatoes for process-ing and manufacturing and selling processed products in Senegal.

Senegal has land suitable for tomato cultivation, its political situation is stable, and public safety risk is low. Markets can also be expected to develop in neighboring countries such as Ghana and Nigeria.

We established the Agri-Business Research and Development Center in Portugal in 2016 and an agricultural company in Senegal at the end of 2017.

Situation Desirable state Environment Action

India

Senegal


Impact of the tomato processing business on people around the world

A rising trend of consumption oftomatoes for processing

Global tomato consumption ranking by country

Approach to the solution of global social issues through tomatoes for processing

Annual consumption per person (in kilograms)

9990 88 84 83

42 3831 29 27 27 22 20 1818 18 13 1010 10 5 2

Top five countries, BRICS, VISTA, and countries related to Kagome from FAO Food Balance Sheets 2013 (as of Feb. 23, 2018)

Turkey

Egypt

Armenia

Tunisia

Greece

Spain

USA

China

Australia

Russia

Italy

Portugal

France

Global average

Brazil

India

Japan

South America

Taiwan

Thailand

Volumes of production and consumption of primary-processed tomatoes around the world(in million tons)

Production of tomato-based products

20

25

30

35

40

45

201720152010200520001997

Consumption of tomato-based products (3-year moving average)

* Ref.: From data released by UN Food and Agriculture Organization (FAO)

Reference The annual tomato consumption per person

worldwide is approximately 18 kilograms on average.

The country with the highest tomato consumption is

Turkey, where the annual consumption per person

is approximately 99 kilograms. The country with

the second highest consumption is Egypt, with

approximately 90 kilograms per person, followed

by Armenia in Eastern Europe, with approximately

88 kilograms per person. Japan is ranked 16th with

approximately 10 kilograms per person.

The production of primary processed products such as tomato

paste, diced tomatoes and whole tomatoes in 2017 was 37,780

thousand tons. The consumption of tomato-based products

has been temporarily modest due to the maturing of markets

in developed countries such as the U.S. and a slowdown in

the economic growth of emerging countries such as Russia,

Africa and South America; however, a shift from raw tomatoes

to processed tomato-based products is expected to occur as

emerging economies develop, and the increase in consumption

is expected to continue. To ensure growth from this situation,

Kagome is actively involved in the development, etc. of new

producing centers in promising regions.

Kagome recognizes the importance of applying the Sustainable

Development Goals (SDGs) to its corporate management. While

diabetes and obesity have been rapidly increasing in the U.S.

and Asian countries in recent years, people are still suffering

from starvation and malnutrition in emerging countries such as

those in Africa. To improve the situation, Kagome is working to

solve social issues by implementing a business model based

on consistent vertical integration from seeds for tomatoes

for processing to the cultivation, processing and delivery of

products.

* Source: WPTC (2017)

Kagome works to contribute to agriculture in Japan and abroad. In Japan, we are expanding the cultivation area of tomatoes for

processing with the aim of growing our business while promoting the increased use of machine harvest to reduce the heavy burden of

harvesting suffered by elderly producers of tomatoes for processing. Overseas, we are promoting farming that utilizes advanced

technologies and are working to commercialize tomato cultivation in emerging regions where economic growth can be expected.


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feature story kagome and tomatoes kagome meets tomatoes · was how they created the bright red...

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